Why is the cryptocurrency market falling? Bitcoin has historically suffered corrections of up to 51% after the previous three US midterm elections, while leading altcoins have already declined as much as 20% ahead of this year’s vote.
The crypto market is experiencing renewed downside pressure as several negative developments collide. The $6.36 billion Binance hack, consecutive sessions of heavy ETF withdrawals and uncertainty surrounding the US midterm elections have intensified selling across digital assets.
A historical chart shared by trader dealer.eth on X has added to investor concerns. According to the analysis, Bitcoin declined between 15% and 51% after each of the previous three US midterm elections. This has prompted speculation about whether another post-election correction could be approaching.
Despite outperforming most major altcoins, Bitcoin has also struggled. BTC is changing hands near $77,088, marking a 7.8% decline compared with its October 1 price. Several alternative cryptocurrencies have recorded substantially larger losses.
Solana has fallen 21.7% since the beginning of October, followed by Dogecoin with a 21.3% decline and Cardano with a 23.3% drop. Ethereum and XRP have each lost approximately 15% over the same period.
The total cryptocurrency market capitalization is now around $2.58 trillion, while 24-hour trading volume has reached $67.9 billion. The Fear & Greed Index currently reads 26, signaling widespread fear among market participants.
With Americans heading to the polls, uncertainty surrounding the political outlook is adding another challenge for crypto investors. Historical data from dealer.eth indicates that Bitcoin has previously experienced substantial declines after midterm elections, although past performance does not guarantee a similar outcome.
What is driving the current market weakness, and which cryptocurrencies are facing the greatest selling pressure?
Why Is the Crypto Market Falling This Week?
Four major factors are contributing to the latest downturn. Their combined impact has weakened investor confidence and reduced the appetite for buying digital assets.
1. Binance security breach
The October 29 Binance exploit resulted in approximately $6.36 billion in stolen cryptocurrency. Blockchain analytics firm Elliptic estimates that around $3.24 billion remains in wallets linked to the attackers, with Bitcoin and Ethereum accounting for most of the holdings. Any movement or liquidation of these assets could create additional selling pressure.
2. Persistent spot ETF outflows
Institutional investment products have also recorded significant withdrawals. US spot Bitcoin ETFs lost $643.3 million on Friday and another $398.6 million on Monday. Meanwhile, Ether ETFs experienced $140 million in outflows on Monday, extending their withdrawal streak to six consecutive trading sessions.
3. Uncertainty surrounding the US midterms
Political developments are creating additional concerns for the cryptocurrency industry. Democrats are favored to take control of the House and could also win the Senate. Such an outcome may complicate negotiations over crypto-related legislation and delay regulatory progress in Congress for at least two years.
4. Rising oil prices and interest rate concerns
Brent crude has climbed above $100 following another US strike on Iran. At the same time, interest rate futures indicate growing expectations of a potential Federal Reserve rate hike in December. Higher borrowing costs and persistent inflation concerns could further reduce demand for risk-sensitive investments.
DISCOVER: North Korea Rejects Binance Hack Allegations as “Absurd” and Blames the US, While $3.24 Billion in Stolen Cryptocurrency Remains Unlaundered
How Did Bitcoin React to the Previous Three Midterm Elections?
Bitcoin’s historical performance following the last three US midterm elections reveals a recurring pattern of post-election weakness.
Trader dealer.eth has compared the previous market declines with Bitcoin’s current valuation, highlighting the potential downside if similar price movements occur again.
- 2014: Bitcoin declined 48% over 71 days, implying a comparable price of approximately $40,500.
- 2018: BTC recorded a 51% correction over 39 days, which would translate to roughly $38,400 at today’s valuation.
- 2022: Bitcoin dropped 15% within 13 days, suggesting a comparable price near $66,300.
Each of these declines eventually marked the bottom of its respective bear market. Bitcoin subsequently recovered, gaining 24%, 45% and 92% during the 12 months following the elections.
However, the historical comparisons come with important limitations. All three periods occurred during broader bear markets, and the 2022 downturn coincided with the FTX collapse. Consequently, the data highlights a historical tendency rather than establishing a reliable forecast for Bitcoin’s next move.
Which Major Altcoins Are Recording the Steepest Declines?
Ethereum is trading around $2,272, down 15.4% since October 1. ETH has shown slightly greater resilience than Bitcoin following the Binance incident, declining 2.8% compared with BTC’s 4.7% loss. However, continued ETF withdrawals remain a significant headwind.
XRP is changing hands near $1.256 after losing 15.7% over the month. Despite its broader decline, XRP is the only top-five cryptocurrency currently posting a positive 24-hour return, gaining 0.6%.
BNB has slipped to approximately $698, representing a 9.2% monthly decline and a 6.2% drop since the Binance hack.
Solana has experienced a sharper correction, falling 21.7% to around $92.52. This makes SOL the weakest performer among the six largest cryptocurrencies.
Dogecoin is also under pressure, trading near $0.0744 after declining 21.3% since the beginning of October.
The broader altcoin market has experienced even heavier losses. Sui has dropped 24.7%, Chainlink has declined 22.6%, and Avalanche has fallen 22.3% during the same period.
Hyperliquid’s HYPE token managed to withstand much of October’s weakness but has lost 10.3% since the Binance incident, marking the largest decline among major cryptocurrencies over that specific period.
TRON has demonstrated relative stability compared with the wider market. TRX is down just 4.2% for October and has gained 2.2% over the past 24 hours.
Solana’s technical outlook also reflects the pressure facing altcoins. SOL has broken below its 200-day exponential moving average at $98.11 and is trading around $92. Its next important downside support is near $83.50, approximately 10% below the current market price.
Meanwhile, Bitcoin’s dominance has increased to 59.9% of the total cryptocurrency market capitalization. This suggests investors are favoring BTC over smaller digital assets as they reduce exposure to higher-risk investments.
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What Could Reverse the Crypto Market Downtrend?
Three developments could influence cryptocurrency prices and determine whether the current correction begins to stabilize.
US election results: The first polling stations are scheduled to close at 7 p.m. ET (00:00 UTC). A decisive outcome could remove some political uncertainty and help investors assess the direction of future cryptocurrency regulation.
Bitcoin and Ethereum ETF demand: A return to positive daily inflows would provide an encouraging signal that institutional investors are rebuilding their exposure. Renewed demand could help absorb some of the market’s current selling pressure.
Developments involving stolen Binance funds: Approximately $3.24 billion in stolen cryptocurrency remains in wallets associated with the attackers. If these assets remain inactive or authorities successfully freeze additional funds, concerns about potential large-scale selling could decline.
For now, the crypto market faces several overlapping challenges. The Binance exploit, institutional fund withdrawals, election-related uncertainty and rising macroeconomic risks are all weighing on sentiment.
Until fresh buying demand returns, Bitcoin and altcoins could remain vulnerable to further volatility. Historical midterm election patterns have attracted attention, but the market’s next direction will ultimately depend on liquidity, investor demand and how these ongoing risks develop.
